Treating Our Ailing Health System

``While many reform schemes have been offered, I am convinced that there are currently no comprehensive reform plans that represent a clear improvement over our present system.``

- Louis Sullivan, secretary of health and human services

What`s wrong with the American health-care system is painfully obvious. It costs too much-more than 12 percent of the gross national product, more per person than anywhere else in the world, and rising inexorably. It leaves too many people without insurance protection-30 million to 37 million, many of them working poor. And it is bogged down with administrative overhead and choked with frustrating red tape.

But despite hundreds of earnest proposals, there is no clear solution to fixing the system, no good way to make it fairer and less catastrophically expensive.

The cost of health insurance for employees adds substantially to the price of almost all American products and makes them less competitive. Employers are increasingly in rebellion against rapidly accelerating health benefit bills and are trying to curb them by raising employees` contributions and deductibles, by pushing workers into HMOs and other forms of managed care, by refusing to cover retirees or by simply discontinuing health insurance as a benefit.

Medicaid bills are swamping state budgets. Yet Medicaid payments are usually so low that hospitals are forced to shift costs to patients with private insurance and many physicians limit the number of Medicaid patients they will accept. Too many low-income people still lack Medicaid coverage, yet one-third of Medicaid money goes to pay for long-term nursing home care for the elderly because no other source of such help exists.

Medicare will be increasingly pinched by growing numbers of elderly people. Its DRG plan to hold down hospital costs by limiting hospitalization has not saved as much money as hoped and has caused hardship to some older patients. Medicare`s new program to set limits on physicians` fees and to wring billions of dollars out of their charges is angering doctors and worrying elderly people who fear physicians will no longer welcome them.

The need for long-term nursing home care for the elderly continues to grow, along with the over-65 population. But there is no consensus on how such care-or less expensive home care-can be paid for.

All of these problems were well diagnosed in the four-part series in the Tribune last week.

Now, Americans have two basic choices: keep tinkering with the current system, or junk it and switch to some kind of national health insurance, perhaps modeled on plans in other countries. Both approaches-with all the variations proposed by members of Congress, medical groups, think tanks, blue- ribbon commissions, politicians, economists, employers and insurers-have cautious advocates and concerned critics.

Interest in a national health-care system financed and run by the federal government is growing. Supporters say it would be simpler and less expensive to operate primarily because of lower administrative costs. No one would go without care. Medical resources would be allocated equally, by need.

But too many criticisms and concerns are unanswered for a consensus to develop for a national health system. For one, it`s difficult to accept that a government that operates a bloated Defense Department, a paperwork-crazy IRS and an out-of-control budget should be entrusted with the health care of all of us.

There are real worries that health care could be subject to political bickering and cut back if forced to compete for tax dollars with everything in the federal budget. Rationing could become a reality-as it has in some form, usually long waiting lists, in most countries with a national health-care system. With no competition, quality of care could decline.

Backers of a national health system generally propose to pay for it with a mix of payroll taxes, income taxes, savings from other programs, lower administrative costs and higher taxes on tobacco and alcohol. But estimates are vague.

With so many concerns about national health care unresolved, more patchwork on the present system seems inevitable. There are powerful economic, political and medical reasons for looking at the private sector, rather than the government, to provide health care. But health care doesn`t fit neatly into classic supply-demand formulas.

What makes the most sense now is to sift through the myriad proposals and try those that would increase competitiveness, strengthen the role of individuals as consumers and develop more efficient and humane ways to provide health care for everyone.